GST: Firms fear dispute over input tax credits

GST Firms fear dispute over input tax credits

Various Indian Companies fear about the Income Tax credit which is claimed by the tax officials later and are also thinking of setting aside funds in order to recover the risks which are arising from the rejection of their claims. Hence in GST: Firms fear dispute over input tax credits.

Experts say that there is no assurance that the input tax credit and transitional credit (happened in the earlier tax system) claimed by various companies will be given chance when it is scrutinized by tax authorities at the end of fiscal year.

While talking about the features of Goods & Service tax (GST) like matching of invoices which is yet to be implemented, the tax is solely dependent on the self-declaration mechanism. Companies are favoring provisional input tax credit until the GST council declares the whole invoice-matching-process.

Archit Gupta, who is the Chief executive officer at the online tax-filing portal known as Cleartax, said, ‚ÄúSince provisional credit has been claimed, companies will have to review and audit credit balances, consider provisioning and make sure credit balances are appropriate, given system matching has not yet been implemented.”

He further added, “Also, if returns are not filed by suppliers, it may lead to credit being disallowed at the time of matching, whenever it takes place or when a new return filing procedure is in place.”

Bipin Sapra, who is the partner in a popular consulting firm EY said there are various areas in which transactions credit is being denied by the tax authorities, along with the credit which is claimed against duties such as Krishi Kalyan Cess. He said, “This could be classified as a contingent liability by companies. However, companies may not provide for credit that is disallowed due to procedural reasons.”

Central Board of Excise or Customs have raised customs last year that taxpayers have obtained high transitional credit which is around Rs 1.5 trillion.

One of the Tax Official said, “The GST Council is now designing an annual tax return for 2017-18 that taxpayers have to file by December 2019. That annual return can have a column for settling any outstanding tax credit claims.”

One of the Official at lobby group Confederation of Indian Industry said that the query regarding tax is not new in the Indian Industry. “Even in the earlier tax regime, tax credits were denied on audit and inspection”, the Official said, adding that the worry should be more of the companies who have filed more credit claims.

In order to understand the GST submission process in simple words, which came into existence from 1st July, the GST Council has put on hold the need to file forms which would have matched the claims of buyers and suppliers. However, taxpayers now have to file a new form known as GSTR 3B and get input tax credit without any matching of claims.

Hence in GST: Firms fear dispute over input tax credits.

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She is the Technical Advisor as well as content Writer at mylifejobs . she provides all the essential information related to blogs. She covers all the news related to GST (Good Service Tax). She is a traveler, explorer and tech lover. Also, she does the research work. Her interest includes writing, playing sports, reading and traveling to new and adventurous places. She loves technology a lot. Whenever a new mobile is launched, she will buy it.